Vietnam healthcare

Up in smoke

May 15th 2014 | Vietnam | Disease trends

Vietnam is home to more than 15m smokers, earning it a place among the world's top 15 consumers of tobacco. The habit is a major cause of death and big contributor to healthcare costs and lost working hours. However, Vietnam's leaders remain reluctant to challenge the country's politically powerful state-owned tobacco industry, which is a huge business and an important taxpayer.

The repercussions of Vietnam's high smoking rate on national health are disastrous. According to the World Health Organisation (WHO), tobacco kills 40,000 people every year in the country, with four times more people dying from smoking-related diseases than on Vietnam's notoriously dangerous roads. Meanwhile, the country's Health Strategy and Policy Institute estimates that 11% of total male deaths are linked to the habit, with almost one-half of all men in Vietnam today smoking regularly.

Greater acknowledgement of the scale of the problem has emerged in recent years. However, a year after the much-heralded but toothless Law on Prevention and Control of Tobacco Harms was introduced to reduce the spiralling consumption of tobacco, change has yet to arrive. Vietnam's leaders have shown a reluctance to tackle such a politically and economically powerful industry. The head of the Vietnam Tobacco Association, Vu Van Cuong, has stated that the sector is worth nearly US$1bn to the annual state budget through sales and taxation. Transnational joint ventures are a lucrative source of foreign co-operation and the cigarette factories spread across the country employ thousands of people.

Domestic demand for cigarettes has always been high, particularly among males, in a country where a packet of 20 can be acquired for less than US$1. The low price is considered by health groups to be a major factor in the high consumption rates, and they have watched on despairingly as domestic cigarette brands have thrived.

Vested interests

The country's tobacco giants are all state-owned, with each overseen by a ministry, provincial people's committee or the ruling Communist Party of Vietnam. This structure has led to a tangled web of vested interests, all of which conflict with the Ministry of Health's ambition to reduce the number of smokers by giving them clear incentives to quit, principally through higher prices and taxation.

Chief among the opposition to this aim is the Vietnam National Tobacco Corporation (Vinataba), the country's market leader, which is run by the Ministry of Industry and Trade. In the past few years its joint ventures have clashed with the Ministry of Planning and Investment, the provincial tax department of Dong Nai and the customs office of Can Tho city. Vinataba is also led by Mr Cuong, and his dual roles make him perhaps the industry's most powerful figure, unafraid to fight hard for its interests.

In March Mr Cuong publicly lambasted a planned excise tax increase on alcohol and tobacco proposed by the Ministry of Finance. Notably, his remarks were carried by the state media, which rarely acknowledges high-level policy differences between figures in power. Mr Cuong argued that the updated tobacco tax—which, if passed, will rise from 65% to 75% in July 2015 before hitting 85% in 2018—will serve only to inspire smugglers, who his association believes already bring 1bn contraband cigarette packets into the country per year. He also warned against a loss in the domestic market share to better-funded overseas competitors, hitting state income. The finance ministry has countered that the tax rise will bring the government additional revenue of US$112.5m in 2016 alone.

Failed promises

Such contradictions have created tension between the ministries of finance, health, and industry and trade, compromising the tobacco law. On paper, the legislation promises much—including bans on smoking in public places, selling tobacco products to under-18s and displaying cigarettes without clear health warnings. But it has been largely ignored, with the authorities either unable or unwilling to enforce it. Street vendors of all ages sell cigarettes to customers of all ages, particularly near bars and restaurants, which very rarely provide the necessary segregated smoking areas. Meanwhile, any reduction in the number of smokers has been negligible.

With the law failing, the Vietnam Steering Committee on Smoking and Health has much to do. On May 31st it will organise activities marking World No Tobacco Day—an event founded by the WHO—with the main goals of lobbying for the tax increase to go ahead and putting the health consequences of smoking back on the agenda. It hopes that greater publicity, along with the damning reports piling up from global health bodies, will inspire the country's top decision-makers to assess the impact poor health is having on the domestic economy.

Economic consequences

Speaking in 2010 in defence of anti-smoking measures that were later rejected by the National Assembly (the legislature), the deputy health minister, Nguyen Thi Xuyen, claimed that Vietnam spends nearly US$110m annually treating just a few of the diseases attributed to smoking, including lung cancer. With non-smokers also badly affected, the financial burden on the healthcare sector and the lost working hours are immeasurable. Meanwhile, the cost of cigarettes—although cheap—can add up quickly, especially for addicted smokers. Vietnam's average monthly wage of US$185 is one of the lowest in Asia, and Mr Xuyen estimated that a smoker spends about one-third of their food allowance on tobacco and cigarettes, indirectly sparking poverty and hunger.

Like other countries, Vietnam is faced with balancing the interests of smokers and non-smokers alike while ensuring that the state coffers benefit from a lucrative source of revenue. However, it may be running out of time faster than many countries to solve its problems. The WHO warns that the annual number of deaths from smoking in Vietnam will rise to 70,000 by 2030 if effective measures are not taken soon. If the country's leaders fail to unite the fighting factions on the issue, they risk seeing economic progress in the past few decades gradually go up in smoke.